Many people create estate plans. An estate plan is an essential tool for people who wish to instruct how their assets are handled after they pass away. But, why is estate planning so crucial?
Without an estate plan, people would die intestate – which means that the state will step in to administer the distribution of assets on behalf of the testator. That situation can create a lot of issues for the deceased’s heirs. For example, the state may not disperse assets according to the wishes of the testator and heirs may have to wait longer for their inheritance because probate would be slower.
If you’ve decided to make an estate plan, you may need to learn how each part is important. Here are some key features of estate plans beyond the basic will:
The executor of the estate
A will instructs who should inherit from an estate. To facilitate the process, the testator can name someone they trust to be the executor of the estate. The estate executor is typically responsible for validating and filing the will. Once that happens, the executor can collect death certificates, contact banks, pay taxes and bills, itemize assets, contact heirs and disperse inheritances.
Power(s) of attorney
An estate plan is mainly focused on what happens after the testator passes away. However, the testator can also name a power of attorney who would act on their behalf while they’re still alive. Someone with the testator’s power of attorney may handle any medical and financial matters, for example, if it’s determined the testator has suffered an injury or illness that incapacitates them.
There’s more to estate planning than just that. Testators can create trusts and name child guardians, for example. It often helps to learn about your legal rights before making an estate plan.